4 min readEuphoria has gripped the cryptocurrency market, with many attributing it to Donald Trump's election. Yet, let's not be fooled: the 47th President of the United States merely lit the fuse on an inevitable explosion. Bitcoin, lest we forget, was designed to transcend political divides. However, for the past decade, the sector has been increasingly marginalised in the US, particularly through the heavy-handed actions of the SEC. The situation was aggravated in the last four years by the Democratic-led government.
While Europe has enjoyed crypto ETFs for over a decade, the US dragged its feet, stifling market development. Under Biden's watch, banking tools became weapons of retribution. Entrepreneurs across various industries found themselves arbitrarily debanked, as Andreessen Horowitz recently highlighted. In this blatant assault on the crypto industry, the SEC was weaponised. Gary Gensler, though a convenient scapegoat, deserves some exoneration: he's no dunce, having taught Bitcoin and blockchain at MIT. His actions during his tenure may have been influenced by the policies of the current administration, not the personal vendetta many have painted it as.
Faced with this impasse, the crypto community naturally sought political refuge—not out of affinity but necessity. Enter Donald Trump, who seized the opportunity with characteristic gusto. One can't help but admire his political acumen and business instincts—after all, it took a savvy entrepreneur to transform Mar-a-Lago from a Marjorie Merriweather Post financial albatross into the prestigious club it is today. Trump, with his razor-sharp intuition, sensed the zeitgeist: he incorporated influential pro-crypto figures into his inner circle, including Howard Lutnick of Cantor Fitzgerald, along with other champions of monetary system overhaul and financial deregulation. These allies are pushing ambitious ideas, such as integrating Bitcoin into US reserves.
As illustrated by Russell Napier in the American Affair Journal, since the demise of the gold standard and Bretton Woods, the world has lacked a clearly defined monetary framework. The proof is that we don’t have a name for it. Bitcoin could play a pivotal role in redefining this system. The Republican stance, championed by crypto-friendly figures, paves the way for an economic transition where the US could reclaim leadership in a digital monetary system anchored by bitcoin. Naturally, this raises eyebrows about deregulating financial markets, which may lead to collateral damage, but ultimately serves economic growth. The most bullish commentator is comparing such a move with the acquisition of Manhattan, Louisiana, California or Alaska by the US government.
Democrats may come to rue the day, but the stark reality is that recent developments have highlighted widespread rejection of their policies, deemed repressive. Moreover, their bungling of key crises—such as hurricane responses—has further eroded the popularity of the Biden administration and Kamala Harris, bolstering Trump's position. His rise, though far from assured initially, was accelerated by these strategic blunders.
“Fragmented, and Lacking Financial Resources, Europe Struggles”
This juncture marks a watershed moment for the crypto ecosystem. After years of suppression, the advent of this favourable leadership is justifiably viewed as a beacon of hope. Even if only a fraction of its pledges come to fruition, the shift in the landscape is already palpable. The objective is unequivocal: to redefine America's position in a multipolar world whilst wagering on innovations like Bitcoin. This vision aligns with the "Make America Great Again" ethos, championing robust domestic growth and a renewed focus on national interests.
This American ambition also lays bare Europe's shortcomings. Fragmented, encumbered by labyrinthine regulations, and lack of investable capital, Europe flounders in the face of America's rapid acceleration. Initiatives like MiCA, whilst significant, appear woefully inadequate compared to the U.S.'s swift execution and innovative prowess. The oft-quoted dichotomy "America innovates, China copies, Europe regulates" has never rung truer. I say this without hyperbole: the outlook for Europe in this context is dire. Recent history is replete with examples of this dynamic. In fields such as space exploration or low orbit satellite deployment, the U.S. are advancing at breakneck speed, leaving Europe and the rest of the world in the dust. Europe struggles to support innovation as Swedish Northvolt bankruptcy illustrates.
These past weeks exemplify how Bitcoin and cryptocurrencies have become pivotal in reshaping global economic equilibria. The U.S., through its pragmatism and capacity for innovation, is rewriting the rules of engagement, whilst Europe, mired in its own inefficiencies, struggles to keep pace. Even BRICS nations and other developing countries are sensing the shift and adapting: Brazil, for instance, is reportedly contemplating the adoption of Bitcoin as a reserve asset, whilst you can pay your taxi in Tether’s USDT in Singapore. Whilst we must acknowledge that challenges lie ahead, this new paradigm paves the way for a digital era. Now, the pressing question is: how will it reshape the world?
